Appeal from the Order of the Superior Court entered May 21, 2007 at No. 207 WDA 2005 affirming the order of the Butler County Court of Common Pleas entered January 25, 2005 at No. EQ99-50018.
The opinion of the court was delivered by: Mr. Justice Saylor
OPINION IN SUPPORT OF REVERSAL
I respectfully differ with the determination of the Justices favoring affirmance that, because Appellants voluntarily disclosed Documents 314 and 395, they waived the attorney-client privilege with respect to Document 529. See Opinion in Support of Affirmance, slip op. at 9.
As a preliminary matter, I recognize that this case presents a threshold issue of first impression, specifically, whether the same subject matter waiver doctrine should be adopted by this Court, as it has been in the federal arena. See Fed. R. Evid. 502(a) & advisory committee notes.*fn1 Notably, federal courts have supplied factors for courts to consider when applying the doctrine. See, e.g., Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349-50 (Fed. Cir. 2005) ("There is no bright line test for determining what constitutes the subject matter of a waiver, rather courts weigh the circumstances of the disclosure, the nature of the legal advice sought[,] and the prejudice to the parties of permitting or prohibiting further disclosures." (citation omitted)).
Applying such a subject matter litmus, it seems that Appellants have not waived the attorney-client privilege with respect to Document 529, because Documents 314 and 395, which were disclosed, do not appear to contain the same subject matter as Document 529. As a general principle, when assessing whether a party has implicitly waived the attorney-client privilege, we start with the unarguable proposition that the attorney-client privilege is highly valued. Accordingly, courts should be cautious about finding implied waivers. Claims of implied waiver must be evaluated in light of principles of logic and fairness. That evaluation demands a fastidious sifting of the facts and a careful weighing of the circumstances. Considering the need for this precise, fact-specific [examination], it is not surprising that the case law reveals few genuine instances of implied waiver.
In re Keeper of Records (Grand Jury Subpoena Addressed to XYZ Corp.), 348 F.3d 16, 23 (1st Cir. 2003) (citations omitted).
Facially, Documents 314, 395, and 529 pertain to the "same subject matter," in the broadest sense of the phrase, as they all deal with some aspect of agent defections. See Opinion in Support of Affirmance, slip op. at 8-9. Document 395 describes the Reflex Action Plan (the practices that Appellants' agencies should follow when agents defect), Document 314 includes counsel's understanding regarding the defection of certain agents, and Document 529 summarizes the legal actions taken by Appellants concerning agent defections. See R.R. 31a-62a.
However, a closer examination of the communications highlights their differences. Document 395 is a comprehensive business manual detailing the various practices that should be applied when dealing with defecting agents. See id. at 32a-62a. Document 314 is a one-page e-mail drafted by an in-house attorney that specifies, by way of four bullet points, his understanding of the defection of four agents in Pennsylvania. See id. at 31a. Notably, Document 314 states, inter alia, that, "[O]ur office will begin assessing and preparing to execute our legal options, both against the agents and possibly the companies they are moving to, and will advise management of those options for a decision." R.R. at 31a.
By contrast, although it is also written by in-house counsel, Document 529 describes, among other things, the present litigation in several states involving Appellants, their former agents, and their new companies. Namely, it discusses the nature of these suits, the money damages sought, the purpose behind the litigation, Appellants' likelihood of success, and the other remedies available to Appellants against defecting agents. It also includes counsel's recommendations regarding Appellants' use of specific contract provisions, as well as the possibility of filing complaints with the insurance departments of certain states. Accordingly, given the principle that courts should be cautious in finding an implied waiver of the attorney-client privilege, and the contents of the communications, it seems that Appellants did not waive the attorney-client privilege with respect to Document 529 by disclosing Documents 314 and 395.
In addressing the scope of the attorney-client privilege, I agree with the Justices favoring affirmance that Document 529 reveals confidential client communications. See Opinion in Support of Affirmance, slip op. at 7. For example, in the opening passage of the memorandum, the in-house-attorney author relates the collective knowledge held by management and in-house counsel regarding the operational impact of agent defections and a business-related judgment, which apparently had been made concerning the necessity of all reasonably possible responsive action. This passage both reveals information apparently communicated by management and, more generally, reflects in-house counsel's knowledge apparently derived from familiarity with business aspects. The memorandum proceeds to detail strategies that appear to reflect prior decisions made by management upon legal consultation, rather than pure legal advice.
I agree with amici curiae, The Association of Corporate Counsel, Pennsylvania Bar Association, Philadelphia Bar Association, Chamber of Commerce of the United States of America, and Pennsylvania Chamber of Business and Industry, that Document 529 exemplifies the substantial difficulty with a narrow approach to the attorney-client privilege rigidly centered on the identification of specific client communications, in that attorney advice and client input are often inextricably intermixed. See Brief for Amici The Ass'n of Corporate Counsel, et al. at 20 ("[T]he communication clearly was made for the purpose of providing legal advice and necessarily draws on, and cannot be separated from[,] the Appellants' communications with counsel. If analysis and legal opinions such as that expressed by counsel in Document 529 were not deemed privileged, in-house counsel would be prevented from effectively performing the professional duties for which they were hired and their clients would not be afforded the protection of lawyer-client confidentiality that they have a right to expect.").*fn2 As succinctly explained by amici curiae Energy Association of Pennsylvania and Pennsylvania Telephone Association:
[Many business enterprises] conduct their businesses in highly regulated environments, and they rely on their counsel -- particularly those in their own legal departments -- to monitor changes in statutes and regulations and judicial and agency interpretations of the law and then to advise corporate managers about those changes and how corporations should respond to them. They likewise rely on their in-house lawyers to serve as ongoing monitors of corporate compliance with the law. The lawyers who regularly serve the Amici Associations' members, especially the counsel who are full-time employees, are exposed to a continuous stream of client communications (many of which are clearly confidential client communications in the traditional sense). These client communications are not only oral and written, but are observational as well. A business that brings a lawyer inside its operations does so with the expectation that the lawyer will observe its operations, so that the lawyer can proactively render advice without waiting for a formal, discrete request. Providing the opportunity for such observation is a form of client communication to the lawyer and is, in essence, a standing request for legal advice. The lawyer's advice, in turn, is necessarily based on the totality of client communications.
To disclose the lawyer's advice is necessarily to disclose something about the operation of the client's business that was communicated to the lawyer through various media, ...